SSC-H/A Model Update: Revise down FY26 workload but profitability may improve in 2027 – roll forward PT; stay OW

研报英文原文证据摘录

SSC-H/A Model Update: Revise down FY26 workload but profitability may improve in 2027 – roll forward PT; stay OW

Asia Pacific Equity Research

19 June 2026

SSC-H/A

Model Update: Revise down FY26 workload but

profitability may improve in 2027 – roll forward PT;

stay OW

We lower our FY26 workload estimates for Sinopec Oilfield Service China

(SSC), as upstream capital expenditure adjustments drag on service Asia Oils

ACactivity in FY26. We expect the gross margin to stabilize and show an Lei Mu

upward recovery trend in 2027 alongside consistent improvement in cost (86-21) 6106 6319

controls. Our new Jun-27 H/A price targets are HK$0.83/Rmb2.43 (rolled lei.mu@jpmorgan.com

forward from Sep-26 HK$1/Rmb2.92) and we retain an OW rating as we SAC Registration Number: S1730521050002

expect steady top-line growth and stable gross margin performance with J.P.LimitedMorgan Securities (China) Company

modest profit contribution from overseas projects. Entering 2Q/3Q26, the

overall workload has faced downward pressure amid slightly weaker

upstream development activities, coupled with rising material and

logistical costs squeezing short-term profit. Looking forward, we think

China state oil majors’ energy security and expansion of overseas new

orders will support both workload and profitability, and we expect SSC’s

gross margin to stablilize in FY26 and edge higher in FY27.

• Workload headwinds in FY26. Full-year workload guidance has been

trimmed slightly. Compared with FY25’s completed workload, FY26

workload guidance for drilling, geophysics, logging and downhole

operations has been cut by 3-5%. We have cut our FY26 earnings

forecast by 8% to reflect this.

• Profitability holds steady with visible recovery momentum. Though